Toyota Reports Profit. Prepare To Be Surprised

Toyota has published its financials for the 2009 fiscal year that ended on March 31. The matter had been a center of speculations for months. First, a loss was predicted. Then, there were speculations that Toyota would report a slight gain, of $500m. Last weekend, Japan’s Yomiuri newspaper said the gain could be as large as $1.1b . They were all wrong. The official numbers are in. And the numbers are …

In a corporate communiqué, Toyota declared that “net income increased from a loss of 437 billion yen to 209.4 billion yen.” If my currency calculator is not mistaken, then that’s $2.26b, double the wildest speculations.

Also, it’s not EBIT, it’s cool net profit. In accordance with U.S. GAAP. (EBIT was 291.4b yen, or $3.15b.)

The surprising numbers are attributed to cost cuts and recovering auto sales.

Not too surprisingly, sales in the U.S.A., Europe, and “other regions” were down, balanced by strong sales in Japan and “Asia.” Global sales declined 8 percent on the year to 18.95 trillion yen ($205b). Consolidated vehicle sales for the fiscal year totaled 7.24m units, a decrease of 330 thousand units from the last fiscal year.

For the current fiscal year through March 2011, Toyota expects a conservative increase of 1 percent in unit sales, and a net profit of 310 billion yen, that’s $3.14b in today’s dollars. Toyota expects the yen to strengthen more against the dollar, and to fall against a recovering Euro. In their budget, the exchange rate is 90 yen to the U.S. Dollar (currently 92.4), and 125 yen to the Euro (currently 117).

According to The Nikkei [sub], Toyota “has not decided on its dividend payment.” Technically correct. However, Toyota’s press release says that Toyota ”also announced a cash dividend for the full fiscal year of 45 yen per share, to be proposed at the general shareholders’ meeting in June.” That’s the same as last year, and the proposal is unlikely to be shot down.

Toyota is not in a mood to spend their unexpected profits. The Nikkei [sub] says that Akio Toyoda announced that executives will receive a costly haircut. “To show our firm, renewed resolve to improve quality, we will forgo bonus payments for senior managing directors and higher-ranking executives this year, as we did last year,” Toyoda told The Nikkei.

“Representative directors will also return some of their compensation.” Let’s see whether that part of “The Toyota Way” will be copied by a U.S. board of directors.